Aaron Katsman 58.
(photo credit: Courtesy)
Many of us are preoccupied with how to improve ourselves in the new year: be
nicer to our fellow man, give more charity, pray with better concentration,
learn more Torah, etc. We focus our self-improvement not just on what we can do
better in the upcoming year, but also by looking back and understanding where we
fell short of our goals. In today’s fast-paced, livingfor- the-moment culture,
taking time out to reflect on the past and thoughtfully plan for the future may
not be trendy, but it’s the only way to truly improve.
Rabbi Abraham J.
Twerski has a great example to illustrate this point: “Is it coincidence that
our generation is infatuated with digital watches and clocks? Old-fashioned
timepieces told time by a pointer, which had the past behind it and the future
in front of it. These timepieces symbolized an awareness of both, but a digital
display focuses exclusively on the present moment and gives no recognition to
the existence of either the past or the future. While we should not allow the
burdens of the past nor the anxieties of the future to exert a destructive
effect on our living, the constructive lessons of the past and a responsible
attitude towards the future can guide us to a proper and responsible
As we tend to spend most of our time preparing ourselves
spiritually for the new year, now is a perfect time to use many of these same
principles to get our finances in order as well. Don’t think that reviewing the
past is for spiritual improvement only. Taking the time to review your
investment moves and strategies of the last year may help you become an improved
Do you overtrade? The culture of instant gratification is also
played out in the arena of investing.
Turn on the TV, check your e-mail
inbox, or even go to a synagogue Kiddush, and you are likely to hear about “hot
stocks” that will make you rich in a very short time. Who needs to own a stock
that increased by 8 percent in value and pays a nice dividend when you can own
the next Google or Microsoft? What inevitably happens is that investors tend to
quickly buy a “hot tip” – only to then sell it as soon as the next “tip” comes
along that they must buy. The investor will never enjoy the steady increase in
value of truly “hot” stocks if he’s always selling in order to buy something
The way to make money over the long run in investing is by sticking
to a strategy.
Isn’t it strange that with all the transparency to be able
to see exactly what top investors are buying and selling, and even read why they
are making the moves that they are, that investors who try and copy them are
unsuccessful? Two university research papers on the subject both came to the
same conclusion: Investors lack the discipline to exactly follow what the “top
investors” are doing. They start interjecting their own analysis into the
equation, don’t buy or sell all the same stocks, and ultimately underperform the
Have a plan Investors need to look forward as well.
need to understand what the point of your investment is for. Whether you invest
to fund your retirement, to pay for children’s weddings, to leave an inheritance
for the next generation, or a combination of these reasons, understand your
goals and invest with them in mind.
Due to the emphasis placed on it by
the financial media, investors often pay too much attention to performance and
too little attention to why they are investing.
If you need your money in
a year or two to pay for a wedding, you may have to accept getting a small,
guaranteed return on your investment, as opposed to “trying to beat the stock
Stock-market gyrations and returns are almost irrelevant to an
investment portfolio with a short-term horizon and where principal
the ultimate goal. If you understand your goals and you invest with an
meeting them, your chances of success will be much greater.
May we merit
a happy and healthy new year – and some successful investments would
nice! email@example.com Aaron Katsman is a licensed financial
adviser in Israel and the United States who helps people open investment
accounts in the US.